CERCLA Changes Bring More Funding for Cleanups and Comfort for Tenants

New revisions to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) have been enacted as part of the Brownfields Utilization, Investment, and Local Development Act of 2018 (“BUILD Act”). Key changes include extension of the Bona Fide Prospective Purchaser (“BFPP”) defense to tenants, increased funding for remediation grants and new authorizations for federal and state funding through 2023.

Tucked inside the Consolidated Appropriations Act, 2018 (H.R. 1625), these and other relevant changes under the BUILD Act were signed into law on March 23, 2018. The revisions include the following:

Reorganization and expansion of the definition of a BFPP to include a tenant where the leasehold was not designed to avoid liability and where the tenant complies with CERCLA’s All Appropriate Inquiry requirements, as well as continuing obligations to maintain the BFPP defense. 42 U.S.C. § 9601(40).

A “petroleum brownfield enhancement” to clarify that brownfields will include “a site for which there is no viable responsible party and that is determined by the Administrator or the State, as appropriate, to be a site that will be assessed, investigated, or cleaned up by a person that is not potentially liable for cleaning up the site under this Act or any other law pertaining to the cleanup of petroleum products.” § 9601(39)(D)(ii)(II)(bb)(as amended).

Increases in funding for remediation grants from $200,000 to $500,000 for each site, which may be further increased by the Administrator to $650,000 based on the level of contamination or site ownership. § 9604(k)(3)(A)(ii).

New multipurpose brownfield grants “to carry out inventory, characterization, assessment, planning, or remediation activities at 1 or more brownfield sites in an area proposed by the eligible entity.” § 9604(k)(4)(as amended).

Allowing grant recipients to use up to five percent of the grant or loan for administrative costs. § 9604(k)(5)(E)(as amended).

Authorizing brownfield funding of $200 million annually between 2019 and 2023. § 9604(k)(13).

Authorizing state response program funding of $50 million annually between 2019 and 2023. § 9628(a)(3).

These amendments are a welcome addition to help facilitate brownfield cleanups and development. In addition, these amendments make available much-needed liability protection to tenants on property with historical contamination.

For more information on whether and to what extent you are impacted by these CERCLA amendments, and how you can ensure your leasehold interest meets the BFPP defense, contact David P. Flynn at (716) 847-5473, dflynn@phillipslytle.com, or Laura L. Mona at (518) 618-1220, lmona@phillipslytle.com.

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